Canal Plus, the French pay-TV heavyweight, has purchased a 12% stake in beleaguered Sweden-based media and entertainment company Viaplay Group.
The news was announced by Canal Plus yesterday (July 20), the same day as Viaplay said it would be making 25% of its workforce redundant and severely contracting its international presence amid major financial concerns. Around 450 people are expected to be hit with redundancies and the cost of Viaplay’s internal restructuring will be roughly $4 million.
This investment by Vivendi subsidiary Canal Plus, which holds multiple top-tier sporting rights across France and Sub-Saharan Africa, shows its growing European ambitions.
Viaplay, meanwhile, is experiencing significant financial difficulties and is having to consider a full sale. Its board chair, Pernille Erenbjerg, announced last week that she would step down due to ill health.
Aside from the layoffs, Viaplay will also exit markets such as the UK, the US, and the Baltic states. Up to this point, it has had a presence in 13 countries, but that number is now likely to be substantially reduced.
The Scandinavian group’s chair, Jørgen Madsen Lindemann, said yesterday that the decisions were being taken in order to “focus our attention and resources on those markets where we can compete for the long term, and ensuring that our products are relevant, popular, and generate healthy returns.”
He added that the group was already exploring “capital raising alternatives,” including either selling the whole company or minority stakes in it.
Lindemann said that other aspects of the new Viaplay strategy include “rightsizing and pricing our product offering in the Nordics,” undertaking a significant cost reduction effort, and conducting “an immediate strategic review of the entire business.”
The new chief executive admitted that various content investments that have been made “are not all paying off,” and the “pursuit of subscriber volume growth has been at the cost of value.”
Lindemann, who led Viaplay’s former parent company MTG, took over as chief executive of the company last month, with a new operating model (which now has had the details unveiled) subsequently announced in an effort to mitigate an economic downturn.
For 2023, Viaplay’s operating losses are expected to come to between $83 million and $102 million.
Canal Plus, meanwhile, already holds a stake of nearly 32% in MultiChoice, the African media group which owns pay-TV broadcaster SuperSport.
Canal Plus has previously called its stake in MultiChoice a “long-term financial investment.”
As well as this MultiChoice interest, Canal Plus already has a significant African presence of its own, being present in French-speaking countries in the center and west of the continent. In April, the number of Canal+ subscribers in Africa stood at 7.6 million.
In total, Canal Plus claims to have a presence across over 50 countries.
